Contract design and supply chain coordination in the electricity industry.

In this article we propose a model of the supply chain in electricity markets with multiple generators and retailers and considering several market structures. We analyze how market design interacts with the different types of contract and market structure to affect the coordination between the different firms and the performance of the supply chain as a whole. We compare the implications on supply chain coordination and on the players’ profitability of two different market structures: a pool based market vs. bilateral contracts, taking into consideration the relationship between futures and spot markets. Furthermore, we analyze the use of contracts for differences and two-part-tariffs as tools for supply chain coordination. We have concluded that there are multiple equilibria in the supply chain contracts and structure and that the two-part tariff is the best contract to reduce double marginalization and increase efficiency in the management of the supply chain

Flexibility and coordination in a supply chain with bidirectional option contracts and service requirement

<p>Symbols: MD simulation results at <i>T</i>_<i>w</i> = 160<i>K</i> (triangles), <i>T</i>_<i>w</i> = 90<i>K</i> (circles) [<a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0165175#pone.0165175.ref015" target="_blank">15</a>]. Solid line: New temperature jump model from <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0165175#pone.0165175.e009" target="_blank">Eq 8</a> with <i>C</i>₁ = 2.348 × 10⁻⁹ and <i>C</i>₂ = 0.036 for <i>T</i>_<i>w</i> = 160<i>K</i>, <i>C</i>₁ = 2.121 × 10⁻⁹ and <i>C</i>₂ = 0.081 for <i>T</i>_<i>w</i> = 90<i>K</i>. Dashed line: Existing temperature jump model from <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0165175#pone.0165175.e016" target="_blank">Eq 11</a> with <i>C</i> = 1.623 × 10⁻⁹ for <i>T</i>_<i>w</i> = 160<i>K</i>, <i>C</i> = 1.207 × 10⁻⁹ for <i>T</i>_<i>w</i> = 90<i>K</i>.</p

Green product development under competition: A study of the fashion apparel industry

Motivated by the observed industrial issues, we analytically develop a fashion supply chain consisting of one manufacturer and two competing retailers and investigate how retail competition and consumer returns affect green product development in fashion apparel. In the basic model, that is, the pure “product greenness level” game, we find that the optimal greenness level of the fashion product decreases along with the level of market competition. This finding implies that a more competitive market leads to a lower optimal greenness level. We also identify that when the consumer return rate increases, the optimal product greenness level is substantially reduced. In the extended model with joint decisions on greenness and pricing, we find that the optimal product greenness level for the whole channel is always higher in the scenario when both retailers charge a higher retail price than in the case with a lower retail price. As such, the underdevelopment of green fashion products is a result of fashion industry features, such as an extremely competitive environment for green product development, relatively low retail prices for fashion products, and high consumer return rates. Therefore, fashion companies should join a co-opetition game for the green product market and simultaneously enhance their efficiency in managing consumer returns. To support our analytical findings, we conduct extensive industrial interviews with various representative companies. Based on this multi-methodological approach (MMA), this paper generates practice-relevant managerial insights that not only contribute to the literature, but also act as valuable references for industrialists

Pricing and Lead Time Decisions in a Duopoly Common Retailer Channel

This thesis studies a dual-level decentralized supply chain consisting of two suppliers and two retailers facing a price- and lead-time-sensitive demand. We model the suppliers' operations as M/M/1 queues and demand as a linear function of the retail prices and promised delivery lead-times offered to the customers. Three different kinds of games are constructed to analyze the pricing and lead-time decisions of the suppliers and retailers. We show the existence of a unique equilibrium in all games and provide the exact formulas to compute the optimal decisions for both the suppliers and retailers. We further present numerical examples to illustrate how the results of our model can be used to provide useful managerial insights for selecting the best strategies for suppliers and retailers under different market and operational environments